Agenda item

Report attached.

The Chief Operating Officer advised that it remained a challenge to bring down the Council’s overspend. The pandemic had led to a gap of £3m in delivered savings. Central Government support had only been available until 30 June and there was a net overspend of £14m.

General reserves only amounted to £10.9m the Council had budgeted for £3m extra and had also received £5m via the East London Waste Authority. Remaining reserves at the end of 2021/22 were therefore expected to be c. £4.8m. It was accepted that this was a lower figure than officers would have wished for.

The impact of Covid-19 has seen a £7m overspend in adult social care. It was wished to undertake more reablement work as it more cost effective to get people back to their own homes. There had also been a rise in referrals and placements needed in Children’s Services. The pandemic had also meant a number of restructures had not been completed and the associated savings not yet delivered.

Future risks included the three-year spending review with any additional funding only available in the first year. The impact of levelling up and losing funding from London to the north of England was a risk as was the impact of the 2021 census on the Council’s financial settlement. Pressures on adult and children’s social care continued with growing demand and a higher complexity of need combining with reduced NHS funding from the Clinical Commissioning Group. The need to maintain social distancing by using more buses and taxis to take children with special needs to and from school had also increased costs.

The budget gap for 2022/23 had been reduced from £19m to £11.8m. This had been achieved through lower concessionary travel costs and the receipt of more Government funding than had been expected. Cost pressures were expected to be less in 2024-26.

Proposed savings included £7m of staff reductions (around 400 posts across the Council) and £4m of savings via new modes of delivery such as the establishment of community hubs in place of the former Public Advice and Service Centre. Savings were also emerging from the Council’s digital programme.

An All Member Briefing had been carried out on the proposals and the final budget proposals would be brought to the Board for scrutiny in late January. The budget consultation process had seen a higher level of response than previous years and focus groups were also due to be organised. It was hoped that the forthcoming settlement announcement from Central Government would reduce the level of savings required.

Officers would give further details of the reasons for the higher number of children with complex needs that required support although it was agreed that the lockdown had caused increased problems for families. The reference in the report to ‘activities not benefitting residents’ referred to excessive levels of bureaucracy within the Council such as dealing with Freedom of Information requests and requiring an annual sign up by residents to the green waste collection. The Rainham and Beam Park joint venture would need a revised business case due to the turning down of the proposed railway station in the area.

Some Members felt that more details was needed on the level of savings and how quickly they would be made. There was also the impact of staff reductions to be considered. Taking the green waste service as an example, officers responded that the new CRM system would remove a lot of queries currently received from the public and hence free up officer time for other duties.

The establishment of the Fusion system would allow for the planned reduction in staff by mid-2022. It was accepted that the impact on services of having less staff would need to be managed effectively but the Council’s people had made staff more versatile as was seen in the response to the pandemic.

A Member suggested that it would be useful to add to the Board’s work programme scrutiny of areas such as the renewal of the waste contract and income from electric vehicle charging points. Detail was also requested on what services provisions needed to be modified as a result of covid cost pressures. Officers could supply a matrix of what would be covered in the January report to the Board.

Officers advised that the budget presented did not anticipate the impact of the second lockdown. The impact of this on social care had been worse than anticipated and there were also instances of lost Council revenue from e.g. the leisure contract. The pressure on adult social care meant it was difficult to reduce the £14m overspend although offices that a reduction in reserves of £4-5m was a worst case scenario.

Members felt that a breakdown of costs for children in care should be taken to children and learning overview and scrutiny with a view to seeing how costs could be reduced. It was clarified that most funding given to local companies during the pandemic was in the form of grants from Central Government and did not have to be paid back. Collection of business rates had held up well during the pandemic. Mental health support was included in cost pressures but this was mainly NHS funded.

The Board noted the update.